Central banks change
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Norges Bank of Norway became the first major bank in the world to raise interest rates after the Covid-19 epidemic, saying higher interest rates would arrive soon.
Bank on Thursday raised prices by 0.25% compared to their zero, citing pre-epidemic economic events and the need to address the growing number of economic uncertainties. It also said that another rise could occur in December and prices will reach about 1.7% by the end of 2024.
Some western central banks are divided over whether to start tightening the bond even though the economy is growing rapidly while some economists are complaining economic growth. Countries such as Iceland, South Korea and Brazil has already raised prices but Norway is the first country in the group of 10 best-selling currencies to do so.
Makers of several points The U.S. Federal Reserve said on Wednesday that it was expecting its first rise next year, with Swedish Riksbank this week determined to remain zero by the end of 2024. Switzerland is following its fixed targets with at least 0.75 percent, its central bank said Thursday.
Norway, the world’s largest bank with a net worth of $ 1.4tn, has grown significantly since the first Covid wave last year when Norges Bank reduced interest rates by 1.5% in just a few weeks.
Governor Oystein Olsen also said the Fed has recently resumed “more radical ideas”. He told a news conference: “Norway is doing well. So it is better to start slowly. These countries think differently.”
Norway currently has an economic downturn but the central bank predicts it will reach around 2%, due to wage growth and strong economic growth.
Its central bank ruled that “the risk of inflation is rising sharply and slower” and indicated a further five-fold increase by the end of next year. “Another hawkish inclination,” was the judgment of experts at Nordea, a major lender in the Nordic region.
The central bank expects economic reforms to continue in the fall due to overuse, high Covid vaccination and unemployment to fall by only 2.7 percent of workers.
It warned: “The goal of tackling the growing number of economic disputes is also showing significant interest.” “The uncertainty arising from higher interest rates has led to a gradual increase in interest rates.”
Norges Bank also spoke about the availability of new Covid models and how they could affect the economy, but said it still expects the trend to continue because families have wasted money earned during the epidemic, especially in employment.